This is, believe it or not, a picture of a financial revolution.
The financial sector is often seen as stodgy and slow to innovate, but the arrival of financial tech, or fintech for short, has forced change management and innovation strategy to the forefront. What trends in innovation will affect finance in 2019? Here’s a look at what’s ahead.
Crowdsourcing And Open Innovation
Part of the financial industry’s conservative nature is down to what’s at risk if there’s a mistake. As a result, crowdsourcing ideas and approaches faced slow going in this sector as institutions have worked out the boundaries between what customers can weigh in on and what needs to be tucked away in the vault. But those borders are becoming increasingly clear, so expect to see crowdsourcing on consumer-facing matters such as charitable giving, branch features, and other areas where customer opinion truly matters. In areas where there’s a bit more control, expect companies to ask everyone, not just one department, for their opinions.
Every time there’s a data breach, people rush to the bank, or its app, to change their passwords and security questions. The Experian breach, in particular, was seen as an enormous violation of trust and saw a cascade of credit freezes, panicked calls to customer service, and increasing scrutiny of the security of every company that handles money. The financial sector should be investing not just in the usual approaches, but start exploring innovation in security. Many apps, for example, are using the biometric sensors that turn up on phones as an extra layer of security, helping to protect client accounts.
Which trend will pull away from the crowd?
Everybody talks about big data, but fintech has an advantage in that it’s been working with data for decades. Creative approaches to data are going to be particularly important, and innovation strategy will be key. Asking employees what they see in the data can lead to new approaches and ideas.
The flip side of this will be questions of privacy. People still want to keep financial matters private, as much as they can, and may view any big data work you do as intrusive. You’ll need to get a sense of what customers are most willing to engage with, and what controls they want.
That brings us to the final trend, and possibly the most important one. There’s an overall demand for accountability and transparency from every corporation and institution, and that leaves the financial industry facing a tricky dilemma. Where does transparency matter to customers, and what form of transparency remains within the laws protecting privacy? Make no mistake, customers will be asking what instruments every financial body has its money in, and how secure those instruments are, and the company with the most thoughtful way of discussing this while pleasing all stakeholders will likely be the big winner as this trend takes further hold.
Finally, of course, you should get ready for surprises. As technology picks up even more speed, and as social trends ebb and flow, there are a host of changes that are going to arrive on your doorstep. A smart, flexible change management strategy that embraces open innovation and creative thinking will be what keeps any company on top. To learn more, request a demo!